get it done. with us this hour, white house communications director dan pfeiffer. from the hill, republican senators mike crapo and john thune plus democratic congressman chris van hollen and tea party freshman. good day. i'm andrea mitchell live in washington. five days to go, they have already missed every deadline and if they don't reach agreement, who is going to get paid and who won't? treasury secretary tim geithner meets with the white house. dan, how do you make those assessments? clearly very unlikely at this stage that everything is going to be done, signed, sealed and delivered by august 2nd. how do you decide, clearly the bond holders get paid. once you have paid that, what do you do about social security, medicare payments, veterans, other salaries? >> reporter: well, i think there is still time to get this done. we're wasting critical time in the house right now as they spend day after day and hour

after hour working on a bill that we know is dead on arrival in the senate. the treasury department will make those decisions about what we do. but we still have time to get this done. it's critically important for the economy we get it done by tuesday. >> can you assure people, those most vulnerable, those getting medicaid, medicare and social security, that they will get their checks? >> reporter: as you know, this is an unprecedented situation. we have never -- the united states has never gone past the debt ceiling. never been a position we were unable to pay our bills. there will be real challenges for every american if we don't get this done. that's why it's so critical the house republicans give up this my way or the highway approach and do something to just do the small amount of compromise we need to get this done. that's what the american people need and deserve. >> speaking of compromise, jay carney in his briefing today made it very clear there are a lot of conversations going on. clearly the vice president, very engaged. mitch mcconnell, harry reid. harry reid has just said the boehner plan which now looks like it will have the votes, now

that he's tried to get his freshmen into line, that that will pass, most likely, then go to the senate. it will be taken up and it will be defeated. so you've got at least 51 votes plus two independents against it in the senate and possibly some republicans as well. then what happens? is there some combination of harry reid and boehner that is being worked on behind the scenes which takes the budget cuts this all have agreed on, that the biden group was talking about, and tries to move on from there? >> well, there is lots of avenues for agreement. there is -- there aren't that many big differences between the boehner plan and the reid plan other than one critical difference which is under john boehner's plan, we would be right back in this mess right at the holiday season, having this same debate, creating uncertainty in the economy at one of the most critical times for the economy, the holiday season. we don't want to do that. that's the wrong thing to do. that's not just the president's opinion. that's just not the opinion of independent financial analysts. that was actually john boehner's opinion and eric cantor's

opinion just a few weeks ago when they were making the same case the president is making. >> true enough, but there is plenty of precedent for short-term debt ceiling limits being raised. aside from ruining all of our holidays, what's the damage in revisiting this six months from now? is the president really, when it comes down to it after the warning from all the big bankers, is he going to veto a short-term increase? >> there are two points. first is we are in a completely different situation now than we have ever been. there have been lots of short-term increases in the past but they were always done in a place where there was not -- one party did not use it as an opportunity to extract their entire policy agenda by holding the economy captive saying give me what i want or we will cause the u.s. economy, the global economy, to tumble. that's never happened before. this is very different. it's never been like this. so that's one. two, we have as i said multiple opportunities to compromise and the idea, this big question of

whether the president will veto it, the chief of staff says he will do it. we have a statement of administration policy that says he will do it. that doesn't matter. it won't get to the president's desk. there are 58 senators who said they would oppose the boehner bill, which makes it less popular than congressman ryan's budget, than the cut, cap and balance plan everyone knew was dead on arrival in the senate. we have to get rid of the political statements, the political games, and get something done. you just need house republicans be willing to do something other than say, as i read this morning, the boehner bill is take it or leave it, we will stick the default on the president. that's not the way we govern in this country. that's not the right thing to do. >> dan pfeiffer, thank you very much. the very latest from the white house. thanks for coming. if the boehner bill does clear the house as is expected now, senate majority leader harry reid says the senate will vote on it tonight and defeat it. republican senator mike crapo serves on the budget committee and you have spent months trying to work out compromises as a

charter member of the gang of six. you know how this works behind the scenes. you are probably involved in all these talks. what do you see as the likely outcome? can something be worked out that does combine the best of harry reid, the best of boehner, and get us past this crisis? >> well, something can be worked out but the bottom line is that we've got to get to something that is real. that's one of the benefits i see in the boehner proposal because although it does push the issue off about seven months for final resolution, it does so by creating a process that will actually reform fiscal policy in a significant way rather than just putting out proposed cuts that are not actually really cuts and that don't have any enforcement mechanism behind them to make sure that in the out years, they actually happen. part of what we're fighting about here is whether the proposed spending reductions can be enforced and made real as opposed to being smoke and mirrors, frankly. >> well, what kind of triggers

or enforcement mechanisms are being discussed now and what do you think is the best possible outcome? >> well, i frankly think the best approach on the enforcement outcome piece of it is to follow something very similar to what the gang of six came forward with its enforcement mechanism, a mechanism that i think would assure that congress cannot use loopholes or false emergency declarations in the future, and get around budget caps, and then require a government-wide sequester if congress somehow does do that, backed up by a 67 vote margin requirement in the senate. that kind of enforcement will assure people, will assure markets and will assure americans that we will be able to count on whatever numbers are being put out with regard to the proposed reductions. >> to your knowledge, is harry reid or democrats in the senate discussing putting that kind of mechanism, that kind of trigger, to back up a boehner proposal or other cuts, has part of an eventual agreement? >> that would be a very huge step toward finding an agreement

that could be agreed to by both sides. i think the key here is that we've got to have real reductions in deficit spending before we increase debt authorization by $2.4 trillion. frankly, i think most americans agree with that. >> do you think the president should veto a short-term deal if that's what ends up on his desk next week? >> well, i don't think that would -- i don't think a short-term deal is ideal, but it may be what congress can do and if that does get to the president's desk, i think it would be a huge mistake for him to veto it. again, the reason i say that is because a short-term extension in the context of what's being discussed is attached to a longer term extension that will be built into a process that assures real fiscal policy changes, and that's what we need to do. in fact, i believe that if we just had a short-term or long-term extension that did not have real enforcement and real potential for fiscal reform, that we would face as great a

potential for downgrade of our bonds as we would if we did nothing at all. >> bottom line, are you going to vote for boehner when it comes up on the senate floor likely tonight? >> i definitely will support bringing the boehner bill forward. i think the way that that vote will be postured is a motion to table by senator reid. >> you will never get to the substance, it will be procedural? >> it will be a procedural vote. but absolutely. i will vote to bring the boehner bill to the floor for a debate and a vote. >> thank you so much, mike crapo. good to see you. can a compromise be forged between harry reid along the lines that senator crapo was just discussing? and john boehner, combining both plans, ending the crisis, putting in real triggers. with me now, maryland congressman chris van hollen, who is ranking member of the budget committee and member of the democratic leadership. you heard senator crapo, who has been one of the people at the table working with senators durbin and others in the gang of six. is that the outline of something you think can be sold and would

succeed in the house with democratic votes? >> i didn't hear all the details of what he put forward but clearly, what we have to do is go through the following steps. the boehner bill, assuming it gets out of the house, will be defeated in the senate. harry reid's made that clear. you have over 50 senators. then it's going to be necessary for senator mcconnell, obviously, to get together with senator reid and put together something that can pass the house. exactly what that looks like is going to require the same kind of back and forth discussion that we've had unsuccessfully up to this point, and as the clock ticks, hopefully we'll be able to forge that compromise that has eluded us so far. >> apparently they are holding out for some kind of trigger, some kind of enforcement that down the road, these cuts will be real, not notional cuts, not cuts of projected defense spending if we bring the troops home, that kind of deal. to get rid of the gimmicks. >> that's right. look, i think you want to identify a target for deficit

reduction, in other words, we want to reduce the deficit by agreed-upon amount, and to make it real, you would have to have triggers. we have always said we should have triggers in order to provide that guarantee that you get the deficit reduction. what's always happened is that our republican colleagues have refused to have balance, meaning we said you have to have trigger thas would have automatic cuts but you also have triggers that have a revenue component, triggers that would generate revenue whether from closing corporate tax loopholes or whether from asking folks at the very top to take more or any other ideas our republican colleagues may have to make sure we have a balanced approach, that we don't end up balancing the budget by slashing medicare, slashing medicaid and cutting education. the president has said $3 in cutting spending to $1 in revenue as part of a balanced package. if you could design a package that had triggers, that had that kind of balance, that would be a

potential way forward. yes. >> congressman, should the president veto a short-term deal? let's say this all collapses, the negotiations over the weekend don't pan out, and what he is handed is really less than what he wants, a short-term deal. he hasn't won on taxes, hasn't won on the duration of it. should he take the risk of vetoing that, given the warning only today from the heads of all the major banks and the possibility of a downgrade no matter what happens? >> i think if you are talking about a couple days in order to try and seal a deal that was pretty much made, that would be one thing. i think the president even indicated in the past that he would be open to that, if a deal was in sight. but there's no reason to put the economy in even greater jeopardy five months from now than we are today, which is exactly what the boehner proposal would do. it would keep that cloud over the economy, it would create

instability, it would continue to threaten increased interest rates and losses in people's retirement accounts, and the president's right to say we cannot afford that. our economy is fragile right now. we should do nothing that hurts it more. that's unfortunately what the boehner proposal does. >> chris van hollen. i'm hearing a little bit of daylight. i'm beginning to see people talking in the same ballpark, at least. i'm betting this is going to be an interesting weekend. >> you put your finger on it. if you can create a mechanism so that if you don't get the deficit savings through the normal process, you have these triggers that guarantee that deficit savings in a balanced way through both spending cuts, but also revenue, then you can get there because then you're guaranteed that you get the deficit reduction at the end of the day. that would allow you to make sure you can extend the debt ceiling for whatever period of time you want. >> chris van hollen, thank you very much. thanks for joining us.

speaker boehner is expected to hold a news conference just about 20 minutes from now, 1:30 eastern. we will bring that to you live. up next, republican senator john thune. send me your thoughts on twitter. follow the show online. >> as soon as the house completes its vote tonight or this afternoon, the senate will move to take up that message that they sent to us. [ male announcer ] members of the american postal workers union

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that is not fair. that is not fair to the american people, to hold out and say we won't agree to raising the debt limit until we pass a balanced budget amendment to the

constitution. it's unfair, it's bizarro. and maybe some people who have only been in this body for six or seven months or so really believe that. others know better. >> john mccain's reality check for house republicans, particularly those freshmen, as they prepare to vote today for john boehner's proposal. seems to have worked as well as the tongue lashing they got from the speaker himself. joining me now is south dakota republican senator john thune. good to see you, senator. thanks so much. we have seen so much drama along the way here but it does look like speaker boehner has the votes and now this is going to end up in your ballpark and there is going to be a motion to table, presumably, from harry reid today. where do we go from here once we get this out of the way? >> we're down to crunch time. we've got to get a solution. the house republicans have consistently put forward plans, they passed a budget on schedule, i might add, something that the senate hasn't done now in over two years. they passed a cut, cap and

balance plan. now they are going to pass a boehner plan. so i would hope that we would be able to get votes in the senate for the boehner plan. looks like the president and white house have whipped hard against it and are persuading democrats to try and block it. so if it comes over here, and i believe it will, we will have that vote and we'll see where it goes from there. but one thing is certain. we've got to get this thing resolved soon. we've got a few days to make that happen. >> we are told that there are 58 votes against it, so it's not going to succeed in the senate. so then there have to be talks and we just were talking to mike crapo and to chris van hollen about the possibility that there could be a negotiated solution with a combination of harry reid's plan, john boehner's plan, and real triggers that would enforce the spending cuts to come. is that something that could get your vote if you had the letter of the law written out in a way that was worthy of a short-term extension for a couple of days until this bill could be

drafted? >> look, i don't think the sides are that far apart. the thing that republicans are going to insist upon is real cuts, not some of the phony cuts, not some of the gimmicks that senator reid has put forward in his latest proposal, and a pathway to get a result on entitlement reforms. that has to mean that we actually can get something done, because we all know that the biggest part of federal spending is what we call the mandatory side of the budget and that's entitlements, social security, medicare and medicaid. the boehner plan has that. the hard trigger in the boehner plan is you don't get another debt limit increase until you do this. i think the way those two can be melted together, first and foremost, we've got to see the house vote on the boehner plan, got to deal with that one way or the other in the senate. i would like to see us pass it in the senate. you may be right, i think the democrats are unifying against it. but that is going to force us to figure out from that point forward, go back to the drawing board and determine how we get this thing done but it's got to happen soon and it's going to

require i think a meaningful commitment to spending reform, spending reductions and a pathway to entitlement reform before you are going to get much republican support for it. >> john thune, thanks so much, senator. thanks for joining us. the sounds of silence. who is missing in action on the debt ceiling debate? the politico briefing up next. in just a few minutes, at 1:30 eastern, speaker john boehner holds his news conference ahead of today's big vote. stay with us. [ p.a. announcer ] announcing america's favorite cereal is now honey nut cheerios! yup, america's favorite. so we're celebrating the honey sweetness, crunchy oats and... hey! don't forget me!! honey nut cheerios. make it your favorite too!

just moments ago, michele bachmann speaking to the national press club, reaffirmed her commitment to just say no to government spending and raising the debt ceiling. >> the federal deficit and the federal debt both are in shambles. at least that's the way the american people see it. and still the president has no plan. it's unthinkable but he still

has no plan. the american people want someone who will stand up for them. they want someone who will say stop. they're looking for someone who will say no. i will be that person who will say no more. >> casey hunt, politico's national political reporter, joins us now. a power hitter in all ways, including on the baseball field. great to see you. first let's talk about michele bachmann and her hard line because the other voice, potential 2012 nominee, of course, that we haven't heard from is mitt romney, missing in action. bachmann first. she is making it clear where she stands. >> she is making it very clear and she is on the right. she's on the far right side of this debate. she doesn't want to raise the debt ceiling. she's dismissed warnings from officials who say this could be catastrophic because she is, as you just showed, so committed to cutting spending.

>> why is mitt romney sort of taken a pass on this? does he really think he can get through the campaign without discussing what has become the critical issue for the white house? >> well, this isn't like any other fight. you've seen mitt romney this whole campaign being very careful not to take political risks, not to get involved in sideshows, to stay focused on his jobs and economy message day in and day out. but this has potentially global implications. it's drawn in the entire government, both sides of the hill, president obama, as we've seen. so it's gotten to the point where romney is starting to take more and more heat for being the only person not to step out. you saw texas governor rick perry step out on the right side of this saying he thinks that some of the potential consequences or fear is overblown so i think there's going to be mounting pressure on romney to step in in coming

days. >> romney was in ohio and was asked about this, pressed about this, and sort of bobbed and weaved. this is what he had to say. >> you heard my message. i indicated that at the very beginning, that my view is that we should have a president who agrees to the cut, cap and balance the federal deficit, the federal budget. that's my position. there are people working on a series of negotiations right now. i'm not going to comment on the day-to-day negotiating process. but my position is very clear. a cut, cap and balance program for federal spending. >> his position was clear he favored something that had already been defeated in both houses and was not part of the conversation any longer. basically, romney is going to continue to try to fly above the fray. >> he's very short on the details. his team has said they will release an economic plan after labor day but of course at that point, we're going to already be through with what's the most monumental economic debate we've had so far. >> thanks so much, casey.

good to see you. next, coming up next, tea party congressman joins us. did the speaker's tongue lashing change his mind? speaker boehner and republican leaders themselves will hold a news conference only minutes from now on capitol hill. i love that my daughter's part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare.

right? get out. i know! who knew? i mean. exactly! really. that's what i mean.

shut the front door. right? seriously. who knew? hello sir. bingo! mahjong! for realz. woop-woop! franklin delano! [ male announcer ] hey, there's oreo creme under that fudge! oreo fudge cremes. indescribably good. you're watching live pictures right now, you can see the house gallery there where john boehner, speaker of the house, will be coming in with kevin mccarthy and eric cantor, the other members of the leaders, and they will be announcing the game plan from here on out. they will have a couple hours of debate, then the vote later today on john boehner's proposal. he clearly has now whipped up the votes after a tongue lashing he gave to his house members, particularly those 87 freshmen yesterday at their caucus meeting. john harwood is cnbc's chief washington correspondent and

joins us now. in earlier conversations, i was talking to mike crapo, then to chris van hollen. crapo, as you know, a member of the gang of six, was talking about some deal down the road in the next 48 hours, let's say, that could combine the cuts in boehner and harry reid once boehner's bill goes down in the senate on that procedural vote tonight, assuming it passes the house. which would have really hard triggers, hard enforcement down the road, and that would get them past this immediate deadline. is that what you're hearing also from the white house, this would be acceptable to the white house? >> well, what i think is the obvious compromise between the two is a longer term which is what the president's insisting on, take it through 2012, debt limit increase through 2013, and beef up the cuts in the reid plan. reid has more up-front cuts but the second stage of his plan doesn't require them.

i think what is likely to happen is just as you suggested, boehner's plan passes the house, fails in the senate, then we've got to figure out a way forward. republicans are saying well, we can jam the democrats, force them to, because the reid plan -- boehner plan will be the only thing that's passed either house. i don't think democrats will accept that and i think they know from the polling that we've seen and also from just the reality of the situation, that the public believes that the president has tried to compromise and republicans haven't. i think that's where the president's leverage would come into play. but there is a way out that's not too difficult to envision. >> in addition to that, what van hollen was acknowledging if we're not talking about just a short-term deal but if we're talking about papering things over for a couple of days, that there is an agreement in principle that they're working on the language, that the president would then perhaps relent and sign just some sort of quick extension, 24, 48 hours, whatever it is, just to get them over the next couple of days and calm the markets.

>> yes. i think he would do that or even longer than 48 hours. there is some talk on the republican side if they are headed toward a solution but haven't quite gotten there of taking the military construction appropriations bill, which has already passed both houses, it's in conference, ready to go, you could put a temporary extension, maybe 30 days if it looks like they are getting a solution. but i think what the white house is saying is they're not going to kick the can to some long midrange period down the road. if it just takes a couple days, as jay carney said at the briefing this morning, we won't let process stand in the way. but there's a difference between a few days or even a couple weeks and a six-month thing that puts it squarely in the middle of 2012. >> john, if you could stand by for a moment as we await john boehner's news conference, i want to bring in kansas republican congressman who serves on the budget committee and is a member of the tea party caucus. congressman, thanks for joining us. there was quite a tongue lashing yesterday in the caucus and

speaker boehner was basically saying get your you-know-whats in line. you don't want to help the president, you're hurting me. does he have the votes now? >> i don't know. i think it will be very close but a lot of talk in washington about personalities. it's not about the speaker, not about the president, not about harry reid. it's about what do we do about our problem of overspending and what's the long-term solution. hopefully we can get past personalities and focus on the principle at hand. >> are you going to vote for it? >> i will not. i don't think it goes far enough. i don't think it solves our long-term problems. it's better than doing nothing but when you're looking at $10 trillion of debt, new debt in the next ten years, and we're only going to deal with maybe $1 trillion of that problem, we've got a long ways to go. cut, cap and balance is the house position that's passed overwhelmingly with bipartisan support. i encourage the senate to actually take it up for actual debate and we might be surprised what happens. >> john mccain said yesterday that his message to freshmen who

have not been around too long is that insisting on cut, cap and balance on a balanced budget amendment tied to the debt ceiling is foolish. he said it's worse than foolish, it's deceiving many of our constituents. he called it bizarro. your response to senator mccain? >> well, john mccain has been around a long time. i appreciate his service. but folks like myself who are newly elected, we heard from the american people. they want change in washington. they don't want more of the same. what we have here going on, the blame game, not providing solutions, americans don't want a deal. they want a solution. i'm very thankful that millions of new americans are involved because they're worried about the future of their nation. they don't care about the next election. they care about the next generation. that's what's so great about new involvement of the american people. that's making a real difference in washington. >> can you see a scenario where this would go down and john boehner's speakership would be at issue? would you then be supporting let's just say eric cantor or someone else for speaker if

you're voting against the express wishes and desires of the speaker of the house? >> to me, it's not the express wishes and desires of anyone up here. it's what i hear back home. i represent 700,000 people and none of them live in washington, d.c. had to tell a town hall last night with 20,000 people the questions we got were pretty clear, they want a solution, they want something that works long-term and is not about the next election or six months or two months, but the next two decades. how do we solve a problem, a debt crisis that's going to envelope our nation because of our spending binges unless we pass that. hopefully we'll get past the politics and the personalities and focus on the principles that we need to focus on. >> would you be open to some compromise if you took the harry reid and john boehner bills and merged them somehow and made some of the harry reid proposed cuts more real, less gimmicky, as some have criticized them for being, if you were satisfied in those cuts and in the enforcement mechanism, could you see a compromise emerging in the

next couple days that freshmen and tea party caucus members like yourself could vote for? >> i think it has to be based on the principles of the cut, cap and balance bill. we got to have a balanced budget amendment long-term and -- >> but congressman, that's not going to pass the senate. there are two houses, a white house. it will be vetoed by the president. if it's going to lose in the senate, isn't there a larger issue here where you could get some cuts, some real cuts, if some sort of compromise could emerge, without the balanced budget amendment which isn't going to pass. isn't that something you should then move on toward in the interests of your 700,000 kansas constituents? >> when you have the greatest deliberative body in the world, we were always taught the u.s. senate refuses to even debate. they won't have a floor debate. harry reid won't bring up cut, cap and balance because i think he's afraid it might pass. if you have an open debate when 75% of the american people from the polls i've seen say they want a balanced budget amendment, they want immediate spending cuts and they want to control spending, in the

meantime, those are the principles that cut, cap and balance. it's hard to say it wouldn't pass because harry reid refuses to let it come to a vote because i think his folks are worried about the next election that if you have these 22 democrats that say they support a balanced budget amendment, then vote against it, clearly there will be political ramifications that they're worried about. so bring it to a vote. i think that's critical. that's what we expect people in washington to do. just have a vote on that. i think they have a vote and debate, i think we will see a great outpouring of support from people all across kansas, at least, saying hey, that's what we want to pass in the senate. yeah. he may be afraid to bring it to a vote but that's really indicative of a real problem in washington. >> with time short, there is very little time to bring that up for a vote again but the speaker of the house has now come in. congressman, thank you very much for joining us today. john boehner. >> listen, this is a challenging time for our country. americans worried about their job, they're worried about our

economy, and they're worried about our debt. today, the house will take action again on a solution to end this debt limit crisis. we'll take action again just like we did on our budget on solutions to the problems that are facing our nation. after today, the house will have sent to the senate not one, but two different bills that will rein in spending, increase the debt ceiling, and bring an end to this crisis. when the house takes action today, the united states senate will have no more excuses for inaction. the bill's not perfect. i never said it was perfect, nobody in my caucus believes it's perfect. but what the bill reflects is a sincere, honest effort to end this crisis in a bipartisan way, to send it to the senate where

it can receive action. throughout this debate, we have promised the american people that we would cut spending more than what we would increase the debt limit, and we also said that we would not entertain any increases in taxes. so today, the house is going to vote on a bill that meets that test. it's been certified by the nonpartisan congressional budget office. there are no gimmicks. there are no smoke screens. it raises the debt limit and cuts government spending by a larger amount than the increase in the debt ceiling. for the sake of jobs, for the sake of our country, i'm asking the representatives in the house in a bipartisan way and asking my colleagues in the senate, let's pass this bill and end this crisis. >> you know, we've heard a lot from the majority leader in the united states senate and when he

says that we are going to face economic collapse if we don't get something done by tuesday, but yet, he keeps killing the measures that we send over and threatening to do the same with the one that we will send over today. now, harry reid can't have it both ways. the fact is the president has asked us to compromise. we've compromised. we sent over our idea, the vision of how we would take this country forward if we were in control. that was cut, cap and balance. the senate dispensed with that immediately and tabled it. the bill today represents a bipartisan negotiated agreement, something that fixes the problem past august 2nd and allows us to continue to focus on the issue of trying to get the fiscal house in order. so the way i see it is harry reid has three different

options. one, suffer the economic consequences of default, which i hope, which all of us hope he doesn't choose. two, bring up the bill that we sent prior, the one that he claims to be opposed to. or to accept the compromise bill that we are sending over today so we can resolve this crisis and get on about the business of this country. >> the country is very stark. you have two different types of leadership in this government. you have one in the white house that doesn't know how to lead. a man that knew the debt crisis was coming even when he voted against it a number of years ago. said he's changed his ways. but has never produced a plan. you have a senate that's never produced a budget in more than 800 days and only talks about what they can't bring up, but can't produce an idea. you have a speaker and a leader

in this house that have sat down with the other party for months to find compromise. when it could not find an end that the other side could not agree to, we produced our own bill. it would lay out a framework of where we would go, cut, cap and balance. sent it to the senate -- >> that's the leadership speaking. john harwood still at the white house for us. john, what are you hearing and what do you think the rest of the day and rest of the weekend's going to look like? >> i'm hearing very aggressive attempt by the republicans to set the terms of debate once they pass this tonight. the senate is going to take it up, table it, in an attempt to kill it. they're still hoping that the senate will be unable, that is the republicans, that senator reid will be unable to move his plan and they can say there's only one plan that's passed one chamber of congress and try to jam the president, jam the democrats.

i think as of now, the administration's insisting that they are not going to give in to that, that the president will veto it, that the senate will not even let it get to his desk. we just have to wait and see what happens after the senate vote tonight. i expect that democrats will hold against it. the logical thing to happen after that would be negotiation between the two sides. i think it will be difficult for republicans to resist a call to do that. >> john, finally, what if something happens outside of their control? obviously the most obvious example would be the ratings agencies. what if there is some sort of downgrade after markets close friday night? then what do they do? >> i think that will put tremendous pressure especially on the republicans. if you look at the polls, the american public wants both sides to compromise. the republican base is saying they don't want their elected leaders to compromise. we saw that in a poll last week. i think at that point, if you had evident consequences in the

stock market, in interest rates, the rising fear among social security recipients, then you would have more pressure on republicans to compromise with the democrats. remember, mitch mcconnell said a couple weeks ago if we don't get this done, we will achieve co-ownership of the economy and a bad economy going into 2012. they don't want that to happen. >> john harwood, thank you so much. that is a perfect segue to our next guest. talking about the nation's leading bankers have already sounded an alarm for both the president and congress in a letter today to both, breaking the deadlock now to avoid a financial meltdown. but what about the damage already done to the economy. that is the subject of the cover story in the "national journal" previewing here today. jim tankersley is the economics correspondent and joins me now. this is the issue coming out we are previewing today. there has already been some damage to the very soft recovery. >> right. there's a couple of very

quantifiable damages we're seeing right now. the biggest is to consumer confidence. consumers in the survey goldman sachs saying this month there's a measurable downtick in consumer spending and confidence which is bad. the second is going to be in hiring. that comes from this massive uncertainty that has been created. ironically enough, by an attempt to cure uncertainty in the economy. >> that is the great irony, of course, to all of this. what the ratings agencies and what the markets are looking for is some sort of glide path, some approach, and already, the conversation has changed. republicans can argue that they have changed the whole dialogue here from spending more to how much can you cut and how credibly will you cut it. >> right. that's true. so what they've done is accelerated the efforts to ease the certainty question about what will our debt levels be down the line. what they've created in that process is a whole different kind of, probably more damaging kind of uncertainty which is the question of can the united states continue to be the bedrock of the global financial system.

will lawmakers actually allow the u.s. to cede its leadership of being like the world's number one risk-free asset. >> the irony here, of course, is we're looking at european countries far, far smaller, greece and the other countries that have wounds that are self-inflicted but not nearly as self-inflicted as this wound would be. >> right. those wounds are inflicted over a long amount of time. this wound, to be clear, we have mounting piles of debt that are the result of policy choices over a long period. but this immediate crisis is entirely lawmaker created. >> if there were a downgrade, we're talking about the possibility of costing us in just interest, that the government pays, $100 billion in the coming year. that has nothing about the impact on consumers in every which way. >> it could trickle down in very damaging ways. the worst would be the housing market which is right now sort of the very big problem child still of the recovery. but if it gets harder to borrow money to buy a house, housing

prices will go lower, recovery will take longer in the housing market and that will hold back hiring, growth, jobs for awhile to come. >> exactly what we don't want. jim tankersley, thank you very much. what political story will be making headlines in the next 24 hours? that's next. be sure to follow the show online. [ male announcer ] get ready for the left lane. the volkswagen autobahn for all event is back. right now, get a great deal on new volkswagen models, including the jetta, awarded a top safety pick by the iihs. that's the power of german engineering. hurry in and lease the jetta s for just $179 a month. ♪ visit vwdealer.com today. energy is being produced to power our lives.

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>> this afternoon the senate will move to take up that message they sent to us. it will be defeated. our economy and -- >> so which political story will be making political headlines in the next 24 hours? msnbc contributor and managing editor of politics.com, chris

cillizza, and we are seeing if he has to sign something more short term, there is actually a compromise in place? >> well, andrea, i think that you are right about that. it feels that way. when we were together in new york yesterday it didn't, so it shows you how these things can change, but it seems if john boehner canal ral lrally the 21s he needs later today, that puts the ball in the court of the senate, and harry reid said we will not vote for the boehner plan, and that is fine, but harry reid and mitch mcconnell will say, are there elements of this that we can pass and send it back to the house and make it something that the house can pass. and point being that they are likely going to pass something later today, and that is furor in than we have gotten in quite a while. it is not cut, cap and balance and not the plans that we know are dead on arrival, that none of them, no piece of them will be ultimately used in a final bill, so it is starting to feel like it is congealing and now it

is feeling like it is congealing and i say that in a positive way, before and it has not worked out, so we are right to b be skeptical, but we are up against it right now and everyone recognizes that. >> and the fact is that there are warnings from everyone that count, the bankers, the bond markets, wall street getting nervous, and we are heading into a weekend, the final weekend, and there's still time for this to be done, but it gets pretty dicey from then on in. >> and andrea, i think it is one of the situations where you saw with john boehner yesterday essentially telling the house republican conference, this is the train, and you better get on it, and once you leave it up to the last 48 hours or 72 hours or 24 hours even, you raise the possibility that the best laid plan even goes slightly awry and not as we default without meaning to. and that is what john boehner is referring to and everyone is warning, don't leave it to the absolute last second, because

that raises the possibility if there is an unforeseen legislative problem or parliamentary problem or arcane procedure not followed with the bill, then we accidentally default or we get ourselves too close to it, and let's not play that game, and get it done. it is amazing to say, five or four days before we default on the loans is plenty of time, andrea, but at this point, i think it is. i don't believe they want to leave it too close to that deadline. >> and chris, at this stage, are they concerned about who is blamed if something bad happens? >> well, that is always my contention, and i talk about it more from a political lenses that they will find some sort of deal for august 2nd, and the sole reason being that the political blame game and what might happen if we did default is too kay ychaotic and too

unpredictable and polls suggest people would blame president obama and it could be a pox on the political houses, and uncertainty is what politicians hate. there is too much uncertainty in default for them to willingly and willfully go down that road. that is why i have always thought that a deal was the most likely scenario out of all of this. >> well, maybe we will have something more positive to report by tomorrow. chris cillizza, tomorrow. >> let's hope. >> that does it for this edition of "andrea mitchell reports." and tomorrow on the show among guests, former white house deputy secretary bill burton joining us with his take. and follow the show on twitter@mitchell reports, and my colleague thomas roberts is in for tamron hall. thomas. >> and coming up right here in the next hour, we are following what washington will do where we are hours away from speaker boehner's house bill. and will he get a lock on these

votes? "hardball's" chris matthews will join me. and plus a count from the white house. and plus the latest on the governor chris christie checked out at the hospital for breathing problems. "newsnation" is minutes away. i love that my daughter's part fish.

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hi, everybody, i'm thomas roberts in for tamron hall today. not a done deal yet. "newsnation" following the nail-biting developments taking place on capitol hill. moments ago john boehner announced that the house was taking action to solve the crisis and that there were no gimmicks, no smoke screens in the debt ceiling bill and we are hours away from the house vote on that package. the speaker's day began with hard hardly enough bills to pass the bill, and he has been scrambling to change minds all day long. boehner says that his bill is the best option. >> when the house takes action today, the united states senate has no more excuses for inaction. the bill is not perfect. i have never said it was perfect and nobody in my caucus believes it is perfect. >> well, boehner got a